Recent genome-wide association studies have shown that genetic polymorphisms in the IL28 (interferon-lambda) gene are highly associated with viral clearance and treatment response. Furthermore variations in the inosine triphosphate pyrophosphatase (ITPA) gene have also been closely linked to ribavirin-induced anemia in other GWAS studies. We are genotyping our patient populations to further explore this genetic linkage and understand the functional relationship of these associations. Hepatic expression of interferon-stimulated genes (ISGs) predicts response to peg-interferon (Peg-IFN) and ribavirin treatment in chronic hepatitis C (CHC). IL28B polymorphisms were shown to play a similar role as well as predicting spontaneous clearance, but the underlying mechanism is still unknown. Recently we showed that type III interferons (IFNs) are the predominant IFNs induced in HCV-infected human hepatocytes (Thomas et al, Gastro 2012). In this study, we aim to explore the functional associations between the IL28B polypmorphism rs12989760, hepatic expression of type I, II and III (IFNs) and ISGs, and treatment response in a well-defined cohort of HCV patients. Sixty CHC patients underwent IFN-based treatment at the NIH clinical center. IL28B rs12989760 genotype was determined using TaqMan assay. RNA was extracted from pre-treatment archived liver biopsies and hepatic expression of type I IFNs (IFNA1, IFNB1), type II (IFNG), type III (Il28B, IL29) and ISGs (ISG15, IFIT1, OAS3, IFI44 and RSAD2) measured by qPCR. Patients were characterized as responders or non-responders based on their end-of-treatment results. Treatment response was analyzed in patients with genotype 1 only. Rs12989760 genotype was CC in 26 patients, CT in 26, and TT in 8. There was a significant correlation between the hepatic expression of type I IFNs (IFNA1 vs IFNB1, r=0.85, p<0.001) and between type III IFNs (IL28B & IL29, r=0.60, P <0.0001). Across IFN types, only IL28B correlated weakly with IFNA1 (r: 0.26; P=0.038) but not with IFNB1. ISGs expression was positively correlated with Type III IFNs (e.g. for ISG115 r=0.55, p<0.001), and negatively correlated with Type I (r=-0.27, p=0.05). ISG expression was lower in IL28B CC genotype patients compared to non-CC patients (P=0.01) as well as in responders vs non-responders (P= 0.0045). Of the IFN genes, only IL28B expression was significantly lower in CC patients comparing to non-CC patients (P=0.008) while IL29, IFNA1, IFNB1 and IFNG had no correlation with the IL28B genotype. Similarly, IL28B expression level was significantly lower in responders compared to non-responders (P= 0.023) whereas no difference was seen in IL29, IFNA1, IFNB1, and IFNG expression levels. The hepatic expression of ISGs in HCV patients is mainly associated with type III IFNs, particularly IL28B, suggesting type III and not type I IFNs drive ISG expression in vivo. Hepatic IL28B expression is functionally linked to the IL28B polymorphism, potentially explaining the tight association among ISG expression, IL28 genotype and treatment response. To further study the role of IL28 in hepatitis C, we analyzed IL28B genotypes and histologic disease progression using paired liver biopsies. Patients from an untreated NIH cohort and the HALT-C trial were genotyped for the IL28B rs12979860 SNP using TaqMan assay. Hepatic inflammation was scored using the HAI (0-18) scale and fibrosis using the Ishak (0-6) scale. Fibrosis progression was defined as a 2-point increase in Ishak score between biopsies. Histological severity on initial biopsy and change between paired liver biopsies were correlated with IL28B genotype. Multiple logistic regression was used to identify variables associated with fibrosis progression. Liver biopsies from 1483 patients were included in the baseline and 278 in the paired analysis (median time between biopsies-4 years). At initial biopsy, patients with IL28B CC genotype had significantly higher portal inflammation (2.3 vs 2.1) and ALT levels (143 vs 100 IU/L) but lower Ishak fibrosis scores compared to those with CT/TT genotype (3.6 vs 3.8), p values <0.05 for all. In the paired biopsy analysis, fibrosis progression occurred in 22% of patients. There was no difference in the frequency of fibrosis progression between patients with IL28B genotype CC and non-CC 17% vs 23%, respectively. Similarly, mean change in HAI scores and ALT levels were not different between CC and CT/TT genotypes. In logistic regression, factors associated with fibrosis progression were higher baseline alkaline phosphatase levels and lower platelet counts. IL28B genotype was not associated with fibrosis progression in patients with CHC. The favorable IL28B CC genotype was associated with greater hepatic necroinflammation and serum ALT levels but less fibrosis progression. These results suggests that IL28B genotype CC may be associated with a state of enhanced antiviral immune response that promotes viral clearance but with a lesser likelihood of disease progression. HCV genotypes (gt) 2/3 respond to interferon (IFN) treatment better than gt 1. In gt 1, non-responder patients exhibit baseline activation of IFN-stimulated genes (ISGs) that renders them less responsive to exogenous IFN. It is not clear whether a differential activation of ISGs underlies the genotypic difference in responsiveness. We studied the hepatic expression of ISGs in patients with gt 1 or 2/3 before and after PEG-IFN injection. 26 untreated patients with chronic hepatitis C (17 with gt 1 and 9 with gt 2/3) were enrolled in a prospective trial with PEG-IFN alfa-2a and ribavirin in standard doses. 14 patients were randomized to a liver biopsy prior to starting treatment (9 with gt 1, 5 with gt 2/3) and 12 patients underwent a biopsy 6 hours after the first PEG-IFN injection (8 with gt 1, 4 with gt 2/3). Gene expression in biopsy specimens was measured using Affymetrix microarray and analyzed by ANOVA model for viral genotype. Significant gene induction was defined as &#8805;1.5 fold-change and p-value with FDR<0.05. IFN response was assessed using the 1st phase of viral decline. Overall 306 genes were affected by PEG-IFN (267 upregulated and 39 downregulated) in the study population.